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Fintech & E-commerce
June 2019 www.intellinews.com I Page 16
52.4% once the RDIF call option is exercised.
Russian mobile operator Megafon will receive a 24% stake (30% voting or 26% if RDIF exercises its option) in exchange for transferring its 10% economic share in Mail.ru to the anchor investor Chinese Alibaba. Alibaba, in turn, will receive a 56% economic and 49.9% voting stake in JV; 48% and if RDIF exercises the option. The RDIF will receive a 5% economic and 1% voting stake in JV; 13% and 10% if the fund exercises its option.
"The JV offers Mail.ru a stake in a company with strong prospects in Russian e-commerce, direct exposure to growth via social networks and Alib- aba as a shareholder," BCS Global Markets wrote on June 6, being in favour of the deal.
According to a report by The Bell, the co-CEO from the Russian side will be Dmitri Sergeev, the current first deputy CEO of MRG, while the co- CEO from the Chinese side will be Liu Wei, the current head of AliExpress in Russia.
"We are pleased to see that MRG will play
a leading in the JV despite its minor stake: the co-CEO `from the Russian side will be nominated by MRG; AER will be deeply and exclusively integrated into MRG's social networks and other properties, while the revenues will be shared; and a sizable share of AER's advertising and marketing budget will be spent on MRG platforms on an arm's-length basis," Sberbank CIB commented on June 6.
Mail.ru will have to contribute $182mn in cash (on top of Pandao) to the JV once it starts operations, mak- ing the largest contribution out of all the partners. "However, part of the cash is to be spent on MRG ad platforms," Sberbank notes. Alibaba and RDIF will also contribute $100mn of cash each to the JV.
The bank reminds that AliExpress is the undisputed leader in Russian e-commerce, with the gross market value in 2018 at around RUB220bn-230bn, being predominantly cross-border trade and almost twice as large as the biggest domestic online retailer Wildberries with RUB111bn.
The implied valuation of the JV is estimated at about $2.2bn Enterprise Value (EV), which is below the $3.6bn that Sberbank uses in its SOTP valuation for deriving the target price (with
a 2019E EV/S of 6; $2.5 per MRG share).
Sberbank believes the AER will be "well positioned to achieve our valuation target if it delivers, which would ultimately benefit MRG via an additional revenue stream and indirectly through the appreciation of AER," and reiterated the Buy rating of Mail.ru at a $29.7 target price.
Most recently, Yandex.Market online marketplace, a joint venture between internet major Yandex and Russia's largest bank Sberbank and another major force in Russian digital commerce space, closed a strategic partnership deal with Chinese e-commerce major JD.com, main rival of Alibaba.
Russia’s Tinkoff Bank positions itself on Russia’s $15bn online travel market Adrien Henni in Moscow for East West Digital News
Russia’s only purely online bank, Tinkoff Bank, has launched an own-branded online travel agency. The offer includes air and railway tickets, packaged tours, hotels and car rentals, reports East-West Digital News (EWDN).
Since April 2018, the bank has put around $2mn into developing this travel service platform, the press service told us. However, the platform worked so far “as a white-label technology” to commercialize air tickets. From now on these